Markets

4 Auto Stocks Likely to Surpass Earnings Estimates in Q4

Auto companies are slated to report results over the next few weeks. In fact, the automakers have already provided sales figures for December and 2018. High employment rate and cheap gasoline prices helped the U.S. auto industry conclude the last year on a positive note. In fact, strong economic fundamentals, along with the rising trend for spacious vehicles, aided the industry to witness annual new-vehicle sales of 17.27 million in 2018, marking 0.3% yearly rise.

Auto Sales

Among the auto giants, General Motors Company's GM actual sales in 2018 plunged 1.6% to roughly 3 million vehicles. Its vehicle sales declined 2.7% in the fourth quarter from the prior-year quarter.

Another automaker based in the United States, Ford Motor Company's F sales dropped in December and 2018 by 3.5% and 9.6%, respectively. Among other automakers, sales of Honda Motor Co., Ltd. HMC and Toyota Motor Corporation (TM) declined 2.2% and 0.3%, respectively, in 2018. However, Fiat Chrysler Automobiles N.V.'s FCAU annual sales rose 8.5% year over year.

What Lies Ahead

Although the industry managed to keep its winning streak alive, the same can't be anticipated for 2019. Rising interest rates and vehicle price hikes are expected to play a major role in influencing buyers' choice. Further, expiration of leases on more than 4 million vehicles is nearing, which will pack the market with used vehicles for sale.

However, there are a few positive signs for the auto stocks too. Robust economic growth, rise in the employment rate, reasonable gasoline prices, sturdy consumer confidence, and rise in income and wages for some companies are likely to boost auto demand.

The Zacks Methodology

There are a few auto stocks that are likely to deliver a positive earnings surprise in the fourth quarter.

The Zacks methodology helps to find stocks with better prospects by combining a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) with a positive Earnings ESP .

Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Research shows that for stocks, with the combination of a favorable Zacks Rank and Earnings ESP, chances of a positive earnings surprise are as high as 70%.

You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

4 Auto Picks

Here are four auto stocks that have the right combination of elements to deliver an earnings beat this quarter.

Harley-Davidson, Inc. HOG has an Earnings ESP of +14.46% and a Zacks Rank of 3 at present. You can see the complete list of today's Zacks #1 Rank stocks here .

Milwaukee, WI-based Harley-Davidson is the world's leading designer and manufacturer of heavyweight motorcycles, and related products and merchandise. The company is expected to release financial results for fourth-quarter 2018 on Jan 29.

Harley-Davidson, Inc. Price and EPS Surprise

Harley-Davidson, Inc. Price and EPS Surprise | Harley-Davidson, Inc. Quote

Oshkosh Corporation OSK has an Earnings ESP of +18.52% and a Zacks Rank of 3 at present.

Oshkosh, WI-based Oshkosh Corporation is a designer, manufacturer and seller of a varied range of vehicle bodies, and specialty vehicles. The company is expected to release financial results for fourth-quarter 2018 on Jan 30.

Oshkosh Corporation Price and EPS Surprise

Oshkosh Corporation Price and EPS Surprise | Oshkosh Corporation Quote

General Motors has an Earnings ESP of +11.39% and a Zacks Rank of 1 at present.

Detroit, MI-based General Motors, founded in 1908, is a leading global automotive company. It is slated to release financial results for fourth-quarter 2018 on Feb 6.

General Motors Company Price and EPS Surprise

General Motors Company Price and EPS Surprise | General Motors Company Quote

WABCO Holdings Inc. WBC has an Earnings ESP of +2.81% and a Zacks Rank #3.

Brussels, Belgium-based WABCO is a leading supplier of technologies and services that improve safety, efficiency and connectivity of commercial vehicles. The company is expected to report fourth-quarter and 2018 results on Feb 15.

Wabco Holdings Inc. Price and EPS Surprise

Wabco Holdings Inc. Price and EPS Surprise | Wabco Holdings Inc. Quote

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General Motors Company (GM): Free Stock Analysis Report

Ford Motor Company (F): Free Stock Analysis Report

Fiat Chrysler Automobiles N.V. (FCAU): Free Stock Analysis Report

Honda Motor Co., Ltd. (HMC): Free Stock Analysis Report

Wabco Holdings Inc. (WBC): Free Stock Analysis Report

Oshkosh Corporation (OSK): Get Free Report

Harley-Davidson, Inc. (HOG): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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